1.
Starting from 1 October 2023 designated imported goods from outside the
European Union (EU) will fall under new EU regulations: the Carbon Border
Adjustment Mechanism (CBAM). Referred to as CBAM goods. CBAM will be gradually
implemented. From 1 October 2023, you will need to report on these goods, and
from 1 January 2026, there will be a registration and payment obligation. This
page provides you with more information on this matter.
2. CBAM
is a price adjustment applied to imports into the EU for designated goods based
on their CO2 emissions in the production process outside the EU. The aim of
CBAM is to prevent the risk of carbon leakage. Also, by encouraging the
reduction of emissions by operators in third countries (countries outside the
EU), global carbon emissions should be reduced.
3. CBAM
is an EU regulation and part of the 'Fit for 55' package. The goal of this
package is to reduce greenhouse gas emissions in the EU by at least 55% by
2030.
4. Currently, the EU operates a system where producers within the EU have to purchase emission allowances for the CO2 emissions of their products (EU Emissions Trading System, EU ETS). The CBAM price adjustment ensures that these producers no longer face a competitive disadvantage when importing from third countries with lower climate standards.
TO WHOM DOES CBAM APPLY?
1. CBAM applies to importers of CBAM goods. These are goods in the categories: iron and steel, cement, fertilisers, aluminium, electricity and hydrogen.
2. The
regulation states the "importer" means either the person lodging a
customs declaration for release for free circulation of goods in their own name
and on their own behalf or, where the customs declaration is lodged by an
indirect customs representative in accordance with Article 18 of Regulation
(EU) No 952/2013, the person on whose behalf such a declaration is lodged.
3. This
may involve the following situations:
- If you
make your own declarations then you are considered the importer and the
obligations under the regulation apply to you.
- If you
use direct representation you are regarded as the importer and the obligations
under the regulation apply to you and not to your direct representative.
- If you
use indirect representation then you have a choice: you must make arrangements
with your indirect representative as to who acts as the importer within the
meaning of the regulation and thus who must comply with the obligations of the
regulation.
- If you
not established in the EU then only an indirect representative can act for you
as importer of CBAM goods and fulfil the obligations of the regulation for you.
You make arrangements in this regard with your indirect representative.
WHAT ARE
THE PHASES OF CBAM ENTRY INTO FORCE?
1. The
entry into force consists of 2 phases:
- the
transition phase (from 1 October 2023 to 31 December 2025)
- the
overall entry into force (from 1 January 2026)
CHANGES
SINCE 1 OCTOBER 2023
1.
Import declaration - The reporting requirement for CBAM goods has been in
effect since 1 October 2023. Within 1 month of the end of each quarter, you as
an importer must submit a report to the European Commission (EC). You have to
report both the amount of CBAM goods you have imported and the amount of CO2
emitted in the production of those goods.
2.
Mandatory reporting - From 1 October 2023, Customs must inform importers of the
mandatory reporting requirement for CBAM goods that will apply from then on. To
make sure that you, as an importer of CBAM goods, have taken note of the
mandatory reporting requirement, you must fill in a fictitious document code
(explained below) with the import declaration of these goods from 1 October
2023.
3. You
thereby declare that you are aware of the mandatory reporting requirement for
these goods. You do not have to provide a document with the declaration, but
you must fill in the document code to make your import declaration. If you do
not fill in a fictitious document code, your declaration will not be accepted.
CHANGES
AFTER A 1 JANUARY 2026
1. If
importers want to import CBAM goods from 1 January 2026, they must be an
authorised CBAM declarant. Apply for the authorisation from the competent
authority in the country where you are based. In addition, importers of CBAM
goods must purchase
2. CO2
certificates from 1 January 2026 to correct the CO2 emitted in the production
of the imported goods. As many CO2 certificates must be handed in annually as
CO2 was emitted in the production of the imported CBAM goods. 1 certificate
thereby equals the emission of 1 tonne of CO2.
MINIMAL
CBAM IMPACT ON MALAYSIA IN FIRST YEAR
1. CBAM
was expected to affect only six to seven per cent of economic sectors in the
first year, but would have a higher impact in subsequent years.
2. CBAM
is a carbon tariff on carbon intensive products such as cement and some
electricity, imposed by the European Union (EU). It will take effect in 2026,
with reporting starting this year.
3. Going
forward the impact will be greater, hence Malaysia will continue to engage the
relevant agencies within the ministry to help our industry to be prepared for
what the EU is doing when it comes to the cross border adjustment mechanism.
Source:
https://www.belastingdienst.nl/wps/wcm/connect/en/customs/content/carbon-border-adjustment-mechanism-cbam#:~:text=The%20aim%20of%20CBAM%20is,carbon%20emissions%20should%20be%20reduced
https://www.nst.com.my/business/2023/03/887095/minimal-cbam-impact-malaysia-first-year-says-tengku-zafrul
